Home construction up in August, but…

Yes, there is good news in real estate beside prices going up. According to the US Commerce Department housing starts increased by 9.2 percent in August, which translates to a seasonally-adjusted annual rate of 1.28 million units.

This, of course, is great news for the housing industry that is starving for inventory. However, the long-term prognosis isn’t so rosy. The high regulatory expense of new construction couple with ever-increasing costs for building materials, fueled largely by ongoing increases in tariffs probably means this gain in new construction will be short-lived.

this is made clear by the fact that new housing permits fell by 5.7 percent to 1.23 million in August. Moreover, single-family home permits dropped by by 6.1 percent while multifamily permits declined by 4.9 percent.

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